The Hong Kong Court of Final Appeal (“CFA”) has allowed an appeal by the Securities and Futures Commission (“SFC”) against the findings of the Court of Appeal that two former executives of Asia Telemedia Limited (“ATML”) had not engaged in insider dealing in ATML shares because of the successful application of the “no profit motive” defence to insider dealing under section 271(3) of the Securities and Futures Ordinance (“SFO”). In allowing the appeal the CFA held that the Market Misconduct Tribunal (“MMT”) ought to have held that the respondents failed to make good the defence under section 271(3).

In The Securities and Futures Commission v. Yiu Hoi Ying Charles, Wong Nam Marian and the Market Misconduct Tribunal [FACV No.5 of 2018], the CFA provided clarification on the innocent purpose defence in insider dealing cases under section 271(3). The CFA found, by a majority of four to one, that the MMT had “erroneously” acquitted the respondents of market misconduct and remitted the matter back to the MMT to deal with the question of sanctions.